Pub Date : 2025-04-19DOI: 10.1016/j.jcae.2025.100470
Jingxin Hu , Bin Liu , Tao Li , Lihua Yuan
This paper investigates the impact of fiscal stress on the corporate structure of affiliates. When facing a high fiscal deficit, governments may prompt firms to set up subsidiaries rather than branches as subsidiaries pay more taxes locally. Consistent with the prediction, we find that fiscal stress is positively associated with firms’ tendency to establish subsidiaries, and that the relationship is weaker in cities with higher GDP or higher administrative hierarchy. We also show that firms’ incentives to obtain cheap land and public subsidies induce their cooperative behavior. Cross-sectional analyses indicate that non-SOE firms and those with higher growth potential are more likely to align with deficit-facing governments’ preferences. Overall, our findings suggest that governments play an important role in shaping firms’ organizational choice.
{"title":"Government fiscal stress and firms’ choice of affiliates","authors":"Jingxin Hu , Bin Liu , Tao Li , Lihua Yuan","doi":"10.1016/j.jcae.2025.100470","DOIUrl":"10.1016/j.jcae.2025.100470","url":null,"abstract":"<div><div>This paper investigates the impact of fiscal stress on the corporate structure of affiliates. When facing a high fiscal deficit, governments may prompt firms to set up subsidiaries rather than branches as subsidiaries pay more taxes locally. Consistent with the prediction, we find that fiscal stress is positively associated with firms’ tendency to establish subsidiaries, and that the relationship is weaker in cities with higher GDP or higher administrative hierarchy. We also show that firms’ incentives to obtain cheap land and public subsidies induce their cooperative behavior. Cross-sectional analyses indicate that non-SOE firms and those with higher growth potential are more likely to align with deficit-facing governments’ preferences. Overall, our findings suggest that governments play an important role in shaping firms’ organizational choice.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100470"},"PeriodicalIF":2.9,"publicationDate":"2025-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143867745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-01DOI: 10.1016/j.jcae.2025.100468
Yongliang Yang , Jitao Zhang , Changting Song , Yingying Wu , Bingbing Zhang
We investigate the effect of environmental information disclosure on the information content of stock prices using data from Chinese-listed companies from 2008 to 2020. We find the following: (1) Environmental information disclosure can increase the information content of future cash flows in stock prices. This effect is long-term, not short-term. (2) This effect is more pronounced in state-owned enterprises, firms with higher institutional ownership and lower management ownership. Voluntary and soft disclosures have a significant effect on stock price informativeness. (3) Environmental information disclosure helps management obtain more investment information from stock prices and promotes the real investment efficiency of enterprises. This research is of great significance for the correct understanding of corporate ESG practices and improvements to the efficiency of capital market allocation.
{"title":"Does environmental information disclosure make financial markets more informative? Evidence from China","authors":"Yongliang Yang , Jitao Zhang , Changting Song , Yingying Wu , Bingbing Zhang","doi":"10.1016/j.jcae.2025.100468","DOIUrl":"10.1016/j.jcae.2025.100468","url":null,"abstract":"<div><div>We investigate the effect of environmental information disclosure on the information content of stock prices using data from Chinese-listed companies from 2008 to 2020. We find the following: (1) Environmental information disclosure can increase the information content of future cash flows in stock prices. This effect is long-term, not short-term. (2) This effect is more pronounced in state-owned enterprises, firms with higher institutional ownership and lower management ownership. Voluntary and soft disclosures have a significant effect on stock price informativeness. (3) Environmental information disclosure helps management obtain more investment information from stock prices and promotes the real investment efficiency of enterprises. This research is of great significance for the correct understanding of corporate ESG practices and improvements to the efficiency of capital market allocation.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100468"},"PeriodicalIF":2.9,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143815076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-01DOI: 10.1016/j.jcae.2025.100469
Liyi Zhu , Qian Sun , Wenyu Zhang , Jian Sun , Lidong Zheng
In this study, we examine the efficacy of the China Securities Investor Services Center (CSISC), an advanced minority shareholder safeguard mechanism endorsed by the China Securities Regulatory Commission (CRSC), in promoting the quality of information disclosure. By utilizing a difference-in-differences analysis on the sample of Chinese listed companies, we find that CSISC shareholding improves the readability of annual reports. Additional analyses reveals that the impact of CSISC shareholding on the readability of annual reports is more pronounced with weaker internal and external governance supervision, poorer operational performance, stronger competitive intensity and senior management without a legal background. Our study contributes to the research related to the economic consequences of the CSISC exercise at the micro-enterprise level and the determinant of annual report readability. Furthermore, our findings hold significant implications for regulatory authorities aiming to enhance the investor protection system.
{"title":"Supervision of not-for-profit minority institutional shareholder and annual report readability: Evidence from a quasi-natural experiment☆","authors":"Liyi Zhu , Qian Sun , Wenyu Zhang , Jian Sun , Lidong Zheng","doi":"10.1016/j.jcae.2025.100469","DOIUrl":"10.1016/j.jcae.2025.100469","url":null,"abstract":"<div><div>In this study, we examine the efficacy of the China Securities Investor Services Center (CSISC), an advanced minority shareholder safeguard mechanism endorsed by the China Securities Regulatory Commission (CRSC), in promoting the quality of information disclosure. By utilizing a difference-in-differences analysis on the sample of Chinese listed companies, we find that CSISC shareholding improves the readability of annual reports. Additional analyses reveals that the impact of CSISC shareholding on the readability of annual reports is more pronounced with weaker internal and external governance supervision, poorer operational performance, stronger competitive intensity and senior management without a legal background. Our study contributes to the research related to the economic consequences of the CSISC exercise at the micro-enterprise level and the determinant of annual report readability. Furthermore, our findings hold significant implications for regulatory authorities aiming to enhance the investor protection system.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100469"},"PeriodicalIF":2.9,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143777645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-28DOI: 10.1016/j.jcae.2025.100467
Pedro Ortín-Ángel , Stefan Sundgren , Ana Millán
The research presents two competing views on the welfare effects of occupational licensing. One stream of literature suggests that licensing is a barrier to entry into professions, limiting competition and resulting in economic rents. A second stream suggests that they can increase well-being by alleviating information problems. We use data on CPAs’ salaries before and after certification to test these conflicting hypotheses. Consistent with the information-alleviation hypothesis, we find a positive correlation between performance on the CPA exam and auditors’ salaries after the exam but not before the exam when the competencies have developed. Furthermore, we find that the positive association is stronger for auditors working at Big 4 firms, younger auditors and male auditors. The abovementioned results indicate that auditors’ technical competencies are valued more highly by Big 4 firms than by non-Big 4 firms. After the CPA certification, we do not observe salary increases that are greater than expected based on previous years’ increases and auditors’ performance on the CPA exam, as the barrier-to-entry theoretical approach suggests. We discuss the implications of the results for the role of CPA regulation.
{"title":"CPA exam score and auditors’ salaries","authors":"Pedro Ortín-Ángel , Stefan Sundgren , Ana Millán","doi":"10.1016/j.jcae.2025.100467","DOIUrl":"10.1016/j.jcae.2025.100467","url":null,"abstract":"<div><div>The research presents two competing views on the welfare effects of occupational licensing. One stream of literature suggests that licensing is a barrier to entry into professions, limiting competition and resulting in economic rents. A second stream suggests that they can increase well-being by alleviating information problems. We use data on CPAs’ salaries before and after certification to test these conflicting hypotheses. Consistent with the information-alleviation hypothesis, we find a positive correlation between performance on the CPA exam and auditors’ salaries after the exam but not before the exam when the competencies have developed. Furthermore, we find that the positive association is stronger for auditors working at Big 4 firms, younger auditors and male auditors. The abovementioned results indicate that auditors’ technical competencies are valued more highly by Big 4 firms than by non-Big 4 firms. After the CPA certification, we do not observe salary increases that are greater than expected based on previous years’ increases and auditors’ performance on the CPA exam, as the barrier-to-entry theoretical approach suggests. We discuss the implications of the results for the role of CPA regulation.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100467"},"PeriodicalIF":2.9,"publicationDate":"2025-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143768760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-26DOI: 10.1016/j.jcae.2025.100464
Xiang Luo , Yi Luo , Jianan Zhou
Previous research suggests that including performance commitment contracts (PCs) in mergers and acquisitions (M&As) increases the post-acquisition risk of goodwill impairment. Using a sample of Chinese companies from 2017 to 2022, we find that M&As with PCs not only lead auditors to be more likely to disclose M&A-related key audit matters (KAMs) in audit reports but also result in these disclosures being less boilerplate. Moreover, KAMs related to M&As with PCs are more informative, as evidenced by higher cumulative absolute abnormal returns, greater abnormal trading volume, and lower share price synchronisation. Our findings further indicate that the negative relationship between PCs and the disclosure of boilerplate M&A-related KAMs is particularly pronounced when auditors face higher accountability risks or when they are more prudent or prioritise their professional reputations. Additionally, M&A-related KAMs with more detailed information attract greater attention from analysts and institutional investors. Overall, our results suggest that auditors, driven by professional diligence, enhance the communicative value of KAMs by disclosing non-boilerplate information, thereby facilitating the effective transmission of risk information in the capital market.
{"title":"The communicative value of key audit matters in M&As: The effect of performance commitments","authors":"Xiang Luo , Yi Luo , Jianan Zhou","doi":"10.1016/j.jcae.2025.100464","DOIUrl":"10.1016/j.jcae.2025.100464","url":null,"abstract":"<div><div>Previous research suggests that including performance commitment contracts (PCs) in mergers and acquisitions (M&As) increases the post-acquisition risk of goodwill impairment. Using a sample of Chinese companies from 2017 to 2022, we find that M&As with PCs not only lead auditors to be more likely to disclose M&A-related key audit matters (KAMs) in audit reports but also result in these disclosures being less boilerplate. Moreover, KAMs related to M&As with PCs are more informative, as evidenced by higher cumulative absolute abnormal returns, greater abnormal trading volume, and lower share price synchronisation. Our findings further indicate that the negative relationship between PCs and the disclosure of boilerplate M&A-related KAMs is particularly pronounced when auditors face higher accountability risks or when they are more prudent or prioritise their professional reputations. Additionally, M&A-related KAMs with more detailed information attract greater attention from analysts and institutional investors. Overall, our results suggest that auditors, driven by professional diligence, enhance the communicative value of KAMs by disclosing non-boilerplate information, thereby facilitating the effective transmission of risk information in the capital market.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100464"},"PeriodicalIF":2.9,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143549829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-04DOI: 10.1016/j.jcae.2025.100456
Qingyuan Li , Albert Tsang , Qiong Wu , Xi Xiong
We examine the effect of environmental, social, and governance (ESG) information provided by rating agencies on investors’ reactions to earnings news. Based on ESG ratings provided by three major rating agencies, we present evidence that firms’ earnings response coefficients (ERCs) are positively correlated with the initiation of coverage, intensity of coverage, and rating dispersion of ESG rating agencies. Our evidence further suggests that the positive effect of ESG information on ERCs is more pronounced for firms that operate within a weaker information environment. In addition, ESG rating agencies tend to play a more important role in strengthening the stock market reaction to positive earnings news than that to negative earnings news. We also document that the main effects are stronger for firms that have higher-quality ESG ratings and are covered by ESG rating agencies facing more intense competition. Collectively, our results support the view that the ESG information made available by ESG rating agencies significantly enhances the stock market reaction to earnings news by aiding investors’ assessment of firms’ future financial performance and earnings sustainability.
{"title":"ESG rating agencies and investors’ reactions to earnings news","authors":"Qingyuan Li , Albert Tsang , Qiong Wu , Xi Xiong","doi":"10.1016/j.jcae.2025.100456","DOIUrl":"10.1016/j.jcae.2025.100456","url":null,"abstract":"<div><div>We examine the effect of environmental, social, and governance (ESG) information provided by rating agencies on investors’ reactions to earnings news. Based on ESG ratings provided by three major rating agencies, we present evidence that firms’ earnings response coefficients (ERCs) are positively correlated with the initiation of coverage, intensity of coverage, and rating dispersion of ESG rating agencies. Our evidence further suggests that the positive effect of ESG information on ERCs is more pronounced for firms that operate within a weaker information environment. In addition, ESG rating agencies tend to play a more important role in strengthening the stock market reaction to positive earnings news than that to negative earnings news. We also document that the main effects are stronger for firms that have higher-quality ESG ratings and are covered by ESG rating agencies facing more intense competition. Collectively, our results support the view that the ESG information made available by ESG rating agencies significantly enhances the stock market reaction to earnings news by aiding investors’ assessment of firms’ future financial performance and earnings sustainability.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100456"},"PeriodicalIF":2.9,"publicationDate":"2025-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143349307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-27DOI: 10.1016/j.jcae.2025.100455
Shijun Guo , Fang Hu
Focusing on the Industry Information Disclosure Guides (IIDGs) in China’s stock markets, we investigate the impact of firm-specific industry information disclosure on stock price synchronicity under proactive public enforcement. Employing a difference-in-differences analysis around industry-targeted events, we find a significant reduction in stock price synchronicity among companies in focus sectors compared to those in non-focus sectors following the introduction of industry-specific disclosure regulations. This reduction is distinguishing industry-level from market-level synchronicity and spilling over to non-regulated industries through manager learning channel, emphasizing the unique information features of IIDGs at the industry level. Additional tests demonstrate the heightened significance of IIDGs in poor information environment, particularly for companies with opaque financial reporting, with limited private oversight and operating in less competitive markets. Our findings provide valuable insights into the interplay between disclosure mechanisms and information environment in emerging markets.
{"title":"Catalyzing transparency: Proactive enforcement of information disclosure and its impact on stock price synchronicity","authors":"Shijun Guo , Fang Hu","doi":"10.1016/j.jcae.2025.100455","DOIUrl":"10.1016/j.jcae.2025.100455","url":null,"abstract":"<div><div>Focusing on the Industry Information Disclosure Guides (IIDGs) in China’s stock markets, we investigate the impact of firm-specific industry information disclosure on stock price synchronicity under proactive public enforcement. Employing a difference-in-differences analysis around industry-targeted events, we find a significant reduction in stock price synchronicity among companies in focus sectors compared to those in non-focus sectors following the introduction of industry-specific disclosure regulations. This reduction is distinguishing industry-level from market-level synchronicity and spilling over to non-regulated industries through manager learning channel, emphasizing the unique information features of IIDGs at the industry level. Additional tests demonstrate the heightened significance of IIDGs in poor information environment, particularly for companies with opaque financial reporting, with limited private oversight and operating in less competitive markets. Our findings provide valuable insights into the interplay between disclosure mechanisms and information environment in emerging markets.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100455"},"PeriodicalIF":2.9,"publicationDate":"2025-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160678","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-10DOI: 10.1016/j.jcae.2025.100454
Suyan Yan, Chang Tong, Qiliang Liu
Based on firm-level data from 2007 to 2020, this study examines the influence of housing prices on labor cost stickiness. The results show that housing prices strengthen firms’ labor cost stickiness. The strengthening effect is particularly pronounced in high-tech industries and during periods of high economic policy uncertainty. Moreover, as the observation period extends, the impact of housing prices on labor cost stickiness diminishes. Further analysis reveals that housing prices have a reinforcing effect on stickiness in terms of employee numbers, with no significant impact on per capita remuneration stickiness. This study indicates that a company will need to allocate additional resources toward investment in machinery and equipment to address the labor cost stickiness stemming from the housing price surge.
{"title":"Housing prices and labor cost stickiness: Evidence from China","authors":"Suyan Yan, Chang Tong, Qiliang Liu","doi":"10.1016/j.jcae.2025.100454","DOIUrl":"10.1016/j.jcae.2025.100454","url":null,"abstract":"<div><div>Based on firm-level data from 2007 to 2020, this study examines the influence of housing prices on labor cost stickiness. The results show that housing prices strengthen firms’ labor cost stickiness. The strengthening effect is particularly pronounced in high-tech industries and during periods of high economic policy uncertainty. Moreover, as the observation period extends, the impact of housing prices on labor cost stickiness diminishes. Further analysis reveals that housing prices have a reinforcing effect on stickiness in terms of employee numbers, with no significant impact on per capita remuneration stickiness. This study indicates that a company will need to allocate additional resources toward investment in machinery and equipment to address the labor cost stickiness stemming from the housing price surge.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100454"},"PeriodicalIF":2.9,"publicationDate":"2025-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160677","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-24DOI: 10.1016/j.jcae.2024.100453
Silver Chung , Daniel Sejun Hwang
This study investigates the impact of directors’ experiences with accounting enforcement on financial reporting quality (FRQ). While firms often regard real-life experiences as a crucial factor in their hiring decisions, the actual impact of directors’ experiences on corporate decisions, particularly financial reporting decisions remains unclear. Using a difference-in-differences method, we find significant changes in a firm’s FRQ when its director experiences SEC enforcement at another firm where she serves as a director. More specifically, we find that discretionary accruals and restatement likelihood decrease while real activities manipulation increases following a director’s Accounting and Auditing Enforcement Releases (AAER) experience. Additionally, such changes are concentrated among subsamples where AAERs allege fraud or GAAP violations, or the director serves on the audit committee at the perpetrating company. Collectively, these findings show that directors’ experiences make differences in related corporate decision-making and SEC enforcement actions have disciplinary effects beyond the firms that directly face charges.
{"title":"Seeing is believing: Director accounting enforcement experience and financial reporting quality","authors":"Silver Chung , Daniel Sejun Hwang","doi":"10.1016/j.jcae.2024.100453","DOIUrl":"10.1016/j.jcae.2024.100453","url":null,"abstract":"<div><div>This study investigates the impact of directors’ experiences with accounting enforcement on financial reporting quality (FRQ). While firms often regard real-life experiences as a crucial factor in their hiring decisions, the actual impact of directors’ experiences on corporate decisions, particularly financial reporting decisions remains unclear. Using a difference-in-differences method, we find significant changes in a firm’s FRQ when its director experiences SEC enforcement at another firm where she serves as a director. More specifically, we find that discretionary accruals and restatement likelihood decrease while real activities manipulation increases following a director’s Accounting and Auditing Enforcement Releases (AAER) experience. Additionally, such changes are concentrated among subsamples where AAERs allege fraud or GAAP violations, or the director serves on the audit committee at the perpetrating company. Collectively, these findings show that directors’ experiences make differences in related corporate decision-making and SEC enforcement actions have disciplinary effects beyond the firms that directly face charges.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100453"},"PeriodicalIF":2.9,"publicationDate":"2024-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160674","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-20DOI: 10.1016/j.jcae.2024.100452
Pengcheng Zhang , Jiayin Qi
This study empirically investigates the impact of carbon emissions trading on corporate financing constraints using a difference-in-differences model. By compiling lists of emission-controlled enterprises from each pilot carbon market, this study demonstrates that carbon emissions trading significantly increases financing constraints for these enterprises. However, no significant regional or sectoral spillover effects are observed. The results of the mechanism testing show that carbon emissions trading diminishes enterprise performance in the stock market and exerts adverse effects on the scale of corporate bank borrowing and the debt maturity structure. Further research reveals that good corporate governance and better information quality can inhibit the adverse effects of carbon emissions trading. This mechanism reduces firms’ investment expenditures, but increases their investments in research and development and financial asset allocation. Notably, despite financing constraints being detrimental to innovation, carbon emissions trading significantly enhances both the level and quality of innovation in firms. These findings underscore the complex effects of carbon emissions trading on corporate financing constraints and highlight the intricate nature of environmental policies at the microeconomic level.
{"title":"Carbon emission regulation and corporate financing constraints: A quasi-natural experiment based on China’s carbon emissions trading mechanism","authors":"Pengcheng Zhang , Jiayin Qi","doi":"10.1016/j.jcae.2024.100452","DOIUrl":"10.1016/j.jcae.2024.100452","url":null,"abstract":"<div><div>This study empirically investigates the impact of carbon emissions trading on corporate financing constraints using a difference-in-differences model. By compiling lists of emission-controlled enterprises from each pilot carbon market, this study demonstrates that carbon emissions trading significantly increases financing constraints for these enterprises. However, no significant regional or sectoral spillover effects are observed. The results of the mechanism testing show that carbon emissions trading diminishes enterprise performance in the stock market and exerts adverse effects on the scale of corporate bank borrowing and the debt maturity structure. Further research reveals that good corporate governance and better information quality can inhibit the adverse effects of carbon emissions trading. This mechanism reduces firms’ investment expenditures, but increases their investments in research and development and financial asset allocation. Notably, despite financing constraints being detrimental to innovation, carbon emissions trading significantly enhances both the level and quality of innovation in firms. These findings underscore the complex effects of carbon emissions trading on corporate financing constraints and highlight the intricate nature of environmental policies at the microeconomic level.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100452"},"PeriodicalIF":2.9,"publicationDate":"2024-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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